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TEN TRENDS IN CLEAN ENERGY INVESTMENT
ARPA-E Workshop
Nathan Serota
31 January 2017
1
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ARPA-E Workshop | 31 January 2017
2
200 EXPERTS ACROSS SIX CONTINENTS
San
Francisco Washington DC
Sao Paulo
Cape Town Sydney
Singapore
Zurich
Munich London
New Delhi Hong
Kong
Beijing New York
North America
40
South America
5
Europe 90
Africa 30
Asia Pacific
35
Tokyo
ARPA-E Workshop | 31 January 2017
3
Europe, Middle East
& Africa
Asia Pacific Americas
ANALYSIS TO HELP YOU UNDERSTAND THE FUTURE OF ENERGY
Solar Wind Other
Renewables
Advanced
Transport
Energy Smart
Technologies Gas
Carbon &
RECs Markets
ARPA-E Workshop | 31 January 2017
4
1. Global clean energy investment fell 18% in 2016
2. Clean energy acquisition activity topped $100bn
3. Green bond issuance boomed, despite the slowdown in 2016 investment
4. A new era in clean energy investment has begun
5. Zero-carbon generation: 81% of all investment under ‘business as usual’
6. Meeting 2°C goal requires doubling ‘business as usual’ investment
7. Clean energy’s share of overall venture capital spending is shrinking
8. Early-stage clean energy investment remains below all-time highs
9. Utilities are using venture capital to gain exposure ‘behind the meter’
10. Cleantech VC has shifted away from new technology, at least in solar
ARPA-E Workshop | 31 January 2017
AGENDA
Ten trends in clean energy investment
5
Notes: Total values include estimates for non-disclosed deals. Includes corporate and government R&D, and spending for
digital energy and energy storage projects. Nominal USD. Source: Bloomberg New Energy Finance
ARPA-E Workshop | 31 January 2017
1. GLOBAL CLEAN ENERGY INVESTMENT FELL 18% IN 2016 (1 OF 3)
$0bn
$50bn
$100bn
$150bn
$200bn
$250bn
$300bn
$350bn
$400bn
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16
New financial investment in clean energy
6
$0bn
$50bn
$100bn
$150bn
$200bn
'04 '08 '12 '16
$0bn
$50bn
$100bn
$150bn
$200bn
'04 '08 '12 '16
EST
Wind Solar
$0bn
$50bn
$100bn
$150bn
$200bn
'04 '08 '12 '16
$0bn
$50bn
$100bn
$150bn
$200bn
'04 '08 '12 '16
Biofuels EST
Note: ‘EST’ is ‘energy smart technologies.’ Source: Bloomberg New Energy Finance
ARPA-E Workshop | 31 January 2017
1. GLOBAL CLEAN ENERGY INVESTMENT FELL 18% IN 2016 (2 OF 3)
$0bn
$50bn
$100bn
$150bn
$200bn
$250bn
$300bn
$350bn
$400bn
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16
New financial investment in clean energy
7
Note: Nominal USD. Source: Bloomberg New Energy Finance
ARPA-E Workshop | 31 January 2017
1. GLOBAL CLEAN ENERGY INVESTMENT FELL 18% IN 2016 (3 OF 3)
Clean energy investment in key markets, 2004 – 2016
$0bn
$50bn
$100bn
$150bn
2004 10 16
$0bn
$50bn
$100bn
$150bn
2004 10 16
$0bn
$50bn
$100bn
$150bn
2004 10 16
$0bn
$50bn
$100bn
$150bn
2004 10 16
$0bn
$50bn
$100bn
$150bn
2004 10 16
Germany US Japan Spain China
8
Note: Nominal USD. Source: Bloomberg New Energy Finance
ARPA-E Workshop | 31 January 2017
2. CLEAN ENERGY ACQUISITIONS TOPPED $100BN
Clean energy acquisition activity by type, 2004 – 2016
6 13 2031 36 38 33 40
53 47
69 71 73
5
1313
25 1923
22
36 13 18
17 2033
77
9 75
7
4
5 5
76
11
$13bn
$33bn$40bn
$65bn $62bn$66bn
$62bn
$80bn$71bn $70bn
$93bn$97bn
$117bn
2004 05 06 07 08 09 10 11 12 13 14 15 16
Asset finance M&A Public markets and private equity
9
Notes: ABS stands for asset-back securities. Bonds issued in other currencies are converted to USD using the exchange
rate on the day of issue Source: Bloomberg New Energy Finance
ARPA-E Workshop | 31 January 2017
3. GREEN BOND ISSUANCE BOOMED, DESPITE THE SLOWDOWN IN NEW CLEAN ENERGY INVESTMENT
Total green bond issuance by bond type, 2007 – 2016
$1bn $0bn $1bn
$6bn$3bn $5bn
$15bn
$37bn
$48bn
$95bn
2007 08 09 10 11 12 13 14 15 16
Asset-backed security
Project bond
US municipal
Corporate
Supranational, sovereign& agency
10
Note: Total values include estimates for undisclosed deals. Includes corporate and government R&D, and spending for
digital energy and energy storage projects (not reported in quarterly statistics). Excludes large hydro, nuclear. Nominal
USD.
Source: Bloomberg Intelligence, Bloomberg
New Energy Finance
ARPA-E Workshop | 31 January 2017
4. WE ARE ENTERING A NEW ERA IN CLEAN ENERGY INVESTMENT
Global clean energy investment vs capacity installations, 2004 – 2015
11
Note: Real 2015 USD. Source: Bloomberg New Energy Finance
ARPA-E Workshop | 31 January 2017
5. ZERO-CARBON GENERATION WILL BE 81% OF ALL INVESTMENT UNDER ‘BUSINESS AS USUAL’
Power generation capacity investment, 2016 – 2040
12
Note: Real 2015 USD. Source: Bloomberg New Energy Finance
ARPA-E Workshop | 31 January 2017
6. MEETING 2° C GOAL REQUIRES DOUBLING ‘BUSINESS AS USUAL’ INVESTMENT (1 OF 2)
Global business as usual
$0trn
$1trn
$2trn
$3trn
$4trn
$5trn
2015-2020
2021-2025
2026-2030
2031-2035
2036-2040
$2.1trn $1.9trn $1.8trn $1.8trn
$1.7trn
Wind, solar, biomass, geothermal
Nuclear and large hydro
$6.9trn
to 2040
13
Note: Real 2015 USD. Source: Bloomberg New Energy Finance
ARPA-E Workshop | 31 January 2017
6. MEETING 2° C GOAL REQUIRES DOUBLING ‘BUSINESS AS USUAL’ INVESTMENT (2 OF 2)
Global business as usual
$0trn
$1trn
$2trn
$3trn
$4trn
$5trn
2015-2020
2021-2025
2026-2030
2031-2035
2036-2040
$2.1trn $1.9trn $1.8trn $1.8trn
$1.7trn
Wind, solar, biomass, geothermal
Nuclear and large hydro
$6.9trn
to 2040
$0trn
$1trn
$2trn
$3trn
$4trn
$5trn
2015-2020
2021-2025
2026-2030
2031-2035
2036-2040
$3.5trn
$4.4trn
$4.1trn
$3.4trn
$2.6trn
$12.1trn
to 2040
Global 2° C scenario
14
Notes: Total US VS investment comes from PitchBook while total clean energy VC comes from Bloomberg New Energy
Finance. Nominal USD.
Source: PitchBook, Bloomberg New Energy
Finance
ARPA-E Workshop | 31 January 2017
7. CLEAN ENERGY’S SHARE OF OVERALL VENTURE CAPITAL SPENDING IS SHRINKING
Venture capital investment, 2010 – 2016
31.2
44.340.6
44.8
68.9
79.3
69.1
0%
5%
10%
15%
20%
$0bn
$20bn
$40bn
$60bn
$80bn
2010 2011 2012 2013 2014 2015 2016
Total US VC investment (left axis) Clean energy as % of US total (right axis)
15
$1.5bn
$2.4bn
$5.7bn
$7.9bn
$12.4bn
$7.0bn
$11.5bn
$8.3bn
$6.6bn
$4.3bn
$5.3bn
$6.3bn
$7.5bn
2004 05 06 07 08 09 10 11 12 13 14 15 16
Other
Bio Energy
Wind
Solar
Energy smarttechnologies
Notes: Early-stage investment includes early-stage VC, late-stage VC and PE expansion capital (ie, growth equity).
Nominal USD. Source: Bloomberg New Energy Finance
ARPA-E Workshop | 31 January 2017
8. EARLY-STAGE CLEAN ENERGY INVESTMENT REMAINS BELOW ALL-TIME HIGHS
Early-stage* investment in clean energy by sector, 2004 – 2016
16
Notes: Investments made by the 30 largest North American and European utilities. (*) VC only runs through Q3 2016.
Digital energy includes, demand response, energy management and smart grid. Source: Bloomberg New Energy Finance
ARPA-E Workshop | 31 January 2017
9. UTILITIES ARE USING VENTURE CAPITAL TO GAIN EXPOSURE ‘BEHIND THE METER’
Utility venture capital by technology, 2010 – 2016*
0%
10%
20%
30%
40%
50%
60%
70%
0
5
10
15
20
25
30
35
2010 2011 2012 2013 2014 2015 2016*0%
5%
10%
15%
20%
25%
30%
35%
40%
0
5
10
15
20
25
30
35
40
2010 2011 2012 2013 2014 2015 2016
Other
Other cleanenergyAdvancedTransportWind
Energy storage& fuel cellsSolar
Digital Energy
BTM share
# of deals
Behind-the meter
(BTM) share (%)
17
303
144
0 5 10
57 58
135
New tech Effic. tech. Financing Installer New tech Effic. tech. Financing Installer
2008-2011 (# of deals: 15) 2012-present (# of deals: 15)
Offgrid Utility-scale Multiple applications Rooftop/building integrated
Notes: Engie Rassembleurs d’Energies’ offgrid investments are non-strategic and thus excluded. Amount is total disclosed
value in utility-backed deals. Data covers the venture capital arms of 29 North American and European utilities. Nominal
USD.
Source: Bloomberg New Energy Finance,
company disclosures
ARPA-E Workshop | 31 January 2017
10. CLEANTECH VC HAS SHIFTED AWAY FROM NEW TECHNOLOGY, AT LEAST IN SOLAR
Utility VC investment into solar companies, by target's activity and application ($m)
2012 – 2016 2008 – 2011
18
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ARPA-E Workshop | 31 January 2017
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